Sunday, October 27, 2013

"The question to what extent these state influences, public debt, taxes etc., grow out of the bourgeois relations themselves -- and hence, e.g. in England, in no way appear as results of feudalism, but rather as results of its dissolution and defeat, and in North America itself the power of the central government grows with the centralization of capital -- is one which Carey naturally does not raise." - The Grundrisse, Notebook VII

There are very real questions about the robustness of libertarianism that public choice theorists do not concern themselves with sufficiently. This is what Marx is getting at here. There are also applications of public choice theory to austerity that are not being probed.

If these sorts of things aren't addressed, public choice theory is going to be more of an ideological backwater than a scientific enterprise. These questions matter a great deal, and they'll be taken up by people who label their work "political economy" or "institutional economics" if the people who label their work "public choice" ignore them.

12 comments:

With regard to Karl Marx making observations that would be in line with the Public Choice School...I have some things to say, but they are admittedly based off secondhand accounts.

Karl Marx apparently does draw on Adam Smith in his unfinished political economy trilogy (Capital), but his references to Adam Smith apparently come off with a grudging tone. From what you have read of Karl Marx, would you say that this is true, Daniel?

Adam Smith does make remarks in The Wealth of Nations which criticise not only the "prodigals and projectors" (in the 18th century, those terms were used in the English language to describe people who we would today call "spendthrifts", or "squanderers", or "wastrels", or "speculators", or "rentiers", or "hoaxers", or "tricksters", or "frauds"), but also the collusion between corrupt businessmen and corrupt government officials. I don't think that this sort of collusion would be approved by the leading figures of the Public Choice School either.

Judging from this excerpt in Grundrisse, Daniel, would you regard Karl Marx as just as opposed to deceitful speculators and profligate rentiers as he is to the collusion of corrupt government officials and corrupt businessmen? Based on what I'm gathering, I get the feeling that Karl Marx doesn't like to explicitly acknowledge that Adam Smith had made similar points before...

Marx acknowledges Smith pretty much every step of the way. From the intro of that same volume, you see lines like: "It was an immense step forward for Adam Smith to throw out every limiting specification of wealth-creating activity – not only manufacturing, or commercial or agricultural labour, but one as well as the others, labour in general." He disagrees with some of Smith's methods and conclusions (for example, he devotes some space in Capital vol. 2 to a critique of Smith's doctrine decomposing all commodity prices to wages+profit+rent; Smith also rates a goodly sum of words in Theories of Surplus Value, a survey often thought of as "Capital vol. 4"), but Marx does not leave it even slightly ambiguous that Smith is one of the giants on whose shoulders he himself is standing.

"A": I see. The people who I got these secondhand accounts were economists who I have corresponded with and talked with. One of them had a deep interest in Karl Marx, the other wasn't as well-versed with Karl Marx's writings. Would it be more accurate to say that Karl Marx is much more acknowledging and more respectful of Adam Smith than the impressions I had received?

Haven't read him but I'm definitely aware of his work. I don't usually think of him as a public choice theorist - would you agree? Granted, as I've said in the past pretty much everyone that says they do something like political economy COULD BE legitimately called a public choice theorist. The only problem is that public choice theory itself seems to so strongly identify either with a particular political view or a set of conclusions.

No, no - he is a long time critic of the work. He has a short (~100 page) book where he uses quite a lot of empirical evidence to debunk the cruder forms of PCT, and also goes on to question the research program as a whole when the 'public interest' hypothesis just fits observed behaviour better. It's available online, good if you have an e-reader:

Hmmm. Who do you have in mind. It's not my field, obviously, so I'm interested in who's out there but the major figures I'm aware of seem to me to insist that the exact opposite is the bedrock finding of the school of thought. Are we talking about nipping along the edges or what?

And if there is anything on a public choice theory of austerity I'd be very interested in learning what that is.